Modification of Complaint U/S 138 NI Act Permissible Before Taking Cognizance, if Defect Is Curable and Causes No Prejudice: Delhi High Court

The Court was hearing a petition under Section 482 CrPC seeking quashing of a complaint filed under Section 138 of the Negotiable Instruments Act, 1881. The petitioner challenged his impleadment in his personal capacity, contending that the cheques in question were issued by a partnership concern and not by him individually.

A bench comprising Justice Amit Mahajan observed that “modification of a complaint may be permitted where cognizance has not yet been taken, the alteration does not alter the essential character of the complaint, the defect sought to be rectified is one which can be cured through a formal amendment, and where such modification does not result in prejudice to the accused or the opposite party.”

Advocate Gagan Gandhi appeared for the petitioner. Advocate Nitin Sharma represented the complainant company. Senior Advocate Ashish Mohan assisted the Court as Amicus Curiae.

Background

The dispute arose from a franchise arrangement between the parties. Pursuant to this arrangement, cheques were issued in favour of the complainant company. Upon presentation, the cheques were dishonoured, prompting the respondent to file a complaint under Section 138 of the NI Act.

In the complaint, the petitioner was described as the sole proprietor of the firm, even though the cheques were signed by another partner. Arguing that the complaint was defective, the petitioner sought to quash the proceedings, asserting that he could not be prosecuted in his personal capacity.

The respondent maintained that the omission of the firm’s name was an inadvertent error and sought permission to amend the complaint to reflect the correct details. It was argued that since the proceedings were still at a preliminary stage and cognizance had not yet been taken, no prejudice would be caused to the petitioner by allowing such an amendment.

The petitioner, however, contended that permitting amendment of the complaint at this stage would amount to altering its fundamental character and argued that he was being unnecessarily harassed in a case that was not maintainable against him.

Court’s Observations

The Court examined the material on record and noted that while the complaint described the petitioner as the sole proprietor of the firm, the cheques had been signed by another partner. The respondent sought to cure this defect through amendment, contending that the omission of the partnership concern was inadvertent.

Justice Mahajan underscored that while Section 141 of the NI Act makes vicarious liability contingent upon arraigning the company or firm as the principal accused, such technical infirmities can be corrected if the amendment is formal and does not prejudice the accused. Referring to the facts of the case, the Court observed that the proceedings were still at a preliminary stage and the petitioner had not yet faced trial. Hence, permitting the amendment would not result in any prejudice.

The Court also stressed that refusing to allow a simple curable amendment would stifle proceedings on technical grounds and defeat the object of Section 138 of the NI Act. It observed that typographical errors or similar infirmities should not result in quashing otherwise maintainable complaints, and that justice would be served by allowing rectification before trial commences.

Conclusion

Dismissing the petition, the Court permitted the complainant to file an application for amendment to implead the necessary parties and correct errors in the complaint, subject to payment of compensatory costs to the petitioner. It directed that such an application must be filed within two months.

Cause Title: Himanshu v. TCNS Clothing Co. Ltd. Neutral Citation: 2025:DHC:1526

Appearances

Petitioner: Advocates Gagan Gandhi, Vijay Kumar, B.S. Chauhan, Luvika, Shraddha Saxena

Respondent: Advocate Nitin Sharma with Jatin Kumar, AR

Amicus Curiae: Senior Advocate Ashish Mohan

Click here to read/download Judgement